Hachette Book Group v. Internet Archive: The Fine Line Between Exclusivity and Accessibility
As the saying goes, “knowledge is power,” and organizations like Internet Archive have made it their mission to provide universal access to all knowledge.[1] These entities have attempted to accomplish this through Controlled Digital Lending (“CDL”), which involves scanning physical books owned by an entity and circulating the digital version in a controlled manner.[2] Under this system, the entity will follow a “owned to loaned ratio”; they will only loan the number of copies they have legally acquired.[3] This practice has at its core the accessibility to knowledge.
However, access is not unlimited, particularly in the world of copyright. While it is in the public interest to allow access to knowledge, a balance must be struck between accessibility and the “assurance to contributors of knowledge [that they will get] a fair return for their labors.”[4] The reason for this is simple. In the CDL practice, the inevitable truth is that the exclusive right to reproduction[5] of copyright owners is left vulnerable because the practice entails the scanning (or copying) of physical books. Moreover, the distribution right[6] may also find itself infringed upon because the exclusive right holders may not have authorized the digital distribution of their works. Therefore, this practice begs the question as to whether it amounts to copyright infringement or if the use is fair under the pretense that it benefits society by making knowledge more accessible.
This is the precise issue that the parties in Hachette Book v. Internet Archive ask the court to decide. Four of the leading book publishers in the United States—Hachette Book Group, HarperCollins, John Wiley & Sons, and Penguin Random House—own “the exclusive rights to publish books in print and digital formats” for a variety of properties.[7] The publishers sued Internet Archive for copyright infringement. The issue was not only that they were engaging in the CDL practice—scanning the books they had in their possession and keeping a owned-to-loaned ration—but also that they were increasing their lending capacity of copyright-protected works[8] to the point that they even lifted the owned-to-loaned ratio controls.[9] In 2018, Internet Archive created what they called the “Open Libraries” project, where partner libraries would send their catalog of books to Internet Archive, Internet Archive would see if a book matches an ebook on their website, and they would increase the number of checkouts allowed on the website.[10] In 2020, due to the COVID-19 pandemic, they launched their “National Emergency Library,” therefore allowing thousands of people to borrow an ebook at the same time.[11] These two projects have compelled the publishers to bring this suit against Internet Archive on the grounds of copyright infringement.
When a plaintiff brings forward a copyright infringement claim, they must establish two elements: (1) ownership of a valid copyright and (2) copying of constituent elements of the work.[12] The Court in this case found that the Publishers established a prima facie case of copyright infringement because (1) they hold the exclusive publishing rights over the books they publish and (2) Internet Archive copied the entirety of the books without the permission of the publishers.[13]
As a defense, Internet Archive claims that their infringement is excused by the doctrine of fair use.[14] Under this doctrine, the court must consider the following four factors: (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.[15] When evaluating these four factors, the courts must assess them all as a whole and on a case-by-case basis.[16]
Purpose and Character of the Use
Under this first factor, courts consider whether the second work is “transformative” and whether it is “commercial.”[17]
Transformative Purpose – Counsels Against a Finding of Fair Use
As to the transformative purpose of the use, courts will look at whether the first work has been altered as to its expression, meaning, or message.[18] In general terms, when the second work is transformative, it tends to weigh in favor for a finding of fair use, but when it merely repackages or republished the original, it is unlikely that it will weigh in favor of fair use.[19] In this case, the court found that Internet Archive did not transform the original works but rather simply scanned them to become e-books and lend them for free, which is a classic example of a derivative work.[20] The Hachette Court brings forward two case examples to draw a distinction between those cases and this one as it pertains to transformativeness. First, in Authors Guild, Inc. v. HathiTrust, the defendant scanned millions of books to create a database for the public to search specific terms.[21] This was found to have a transformative purpose, and therefore fair use under this factor, because a result of a word search is different to the message from the page of the book from which that work is found.[22] Second, in Google Books[23], the court found transformative use because the defendant “scanned copyrighted books to create a database that would include a “snippet view” search function that allowed readers to view a few lines.”[24]
Internet Archive makes the argument that it serves the transformative purpose of the secondary work because it fulfills the “function of making the delivery of library books more efficient and convenient.”[25] However, the court found that Internet Archive missed the point of the utility-expanding transformative use argument. Whereas in other instances the court has found transformative uses in creating a searchable database, detecting plagiarism, and displaying thumbnail art reproductions, here, Internet Archive did not expand the utility of the copyrighted works in question in a transformative way; it merely replaced authorized copies.[26] Nor did Internet Archive improve the efficiency of delivering content.[27]
Commercial Nature – Counsels Against a Finding of Fair Use
The second component of this first fair use factor takes into consideration whether the second work has a commercial nature or if for nonprofit educational purposes.[28] According to Internet Archive, their use of the copyrighted works was wholly noncommercial because of their non-profit nature.[29] However, just because an entity has a non-profit status does not mean that they are automatically under fair use for the second factor. Instead, the question is whether the user will benefit financially from using the material without paying the standard price.[30]
In this case, it is apparent that Internet Archive is using the material without paying the standard price; it is attracting new members and soliciting donations by offering the copyrighted works without a license, therefore gaining an advantage or benefit from its distribution without consent.[31]
Nature of the Copyrighted Work
The courts, when examining the nature of the copyrighted work, will look at whether the work is expressive or creative, or whether it is factual, and whether it is published or unpublished.[32]
As to the question of whether the works are creative or expressive, or rather factual, the court acknowledges that both fiction and non-fiction works owned by the publishers fall within the protections of the Copyright Act.[33] As to the argument of published or unpublished works, when a work is unpublished, it tends to negate a defense of fair use because it deprives the copyright owner of their right of first appearance[34]; but the opposite is not necessarily true.[35] Internet Archive states that the Publishers published their works over five years ago and, thus, they are not interfering with the author’s rights. However, copyright protection lasts for more than five years,[36] so the publishers have not lost their protection.
As a whole, the court found here that the second factor weighs against a finding of fair use.[37]
Amount and Substantiality Used
The third element in a fair use analysis looks at the quantitative and qualitative amount and substantiality of the use.[38] The court in this case acknowledged that, sometimes, copying an entire work is necessary.[39] However, it was not necessary here; rather, Internet Archive copied the entire works in suit for no transformative purpose and competed directly with licensed ebooks.[40] Therefore, the court found that this third factor also weighs against a finding of fair use.
Effect of the Use
This final factor considered whether there are any effects on the actual or potential market of the copyrighted works.[41] Under this factor, courts will consider whether the secondary work usurps the market from the original by acting as a substitute of the original.[42] If so, the factor will weigh against fair use.
The court discussed the potential impact on licensing revenues that publishers would suffer from Internet Archive’s offer of complete books without paying a fee.[43]. This is so because Internet Archive is supplanting the publisher’s place in the market by providing complete ebook editions without paying the fee that publishers have the right to. In this sense, Internet Archive is offering a substitute to the market. Moreover, if this conduct becomes widespread by allowing new partners to contribute more copies of copyrighted works, it would have a snowball effect; every library would do the same as they would rather have the ebook version and avoid paying the fee[44]
This factor must also consider the public benefits that Internet Archives’ practices may produce. While it is true that it increases access to books and, therefore, promotes the progress of science and useful arts[45], this cannot outweigh the market harm to the Publishers, as it evidently deprives them from revenue they are entitled to.[46] The court’s finding in this case was, therefore, that the fourth factor weighed against a finding of fair use.
Conclusion
Fair use is not a defense that allows entities to make unauthorized copies and distributions in place of the print book without lending the print book even when lawfully acquired. It does not allow for it when reproduced and distributed without transforming the works and, thereby, creating competing substitutes for the originals. All in all, the Court has not found that any of the factors weigh in favor of a fair use defense. Therefore, Internet Archive has committed copyright infringement.
Footnotes
